Fitch Rates the Urban Redevelopment Agency of the City of Suwanee, Georgia 2006 Revs 'AA-'.

NEW YORK -- Fitch rates the Urban Redevelopment Agency of the City of Suwanee, GA's $6.635 Revenue Bonds, Series 2006 'AA-'. The bonds are scheduled for competitive sale on December 19. The city's financial advisor is Public Financial Management. The bonds mature serially Jan. 1 2008-2027. The bonds are payable from installment payments, by the City of Suwanee, which are secured by a pledge of the city's full faith and credit and unlimited taxing power. The Rating Outlook is Stable.

The 'AA-' rating reflects the strong overall credit quality of the City of Suwanee. Suwanee's overall growth in its employment and tax base as well as enhanced, strong financial flexibilty supported by high general fund balances are key credit strengths. The city also benefits from an increasingly diversfied employer base as well as high wealth levels. Some concern surrounds the very rapid growth occurring in the city and its effect on future operations. However, this concern is largely mitigated by the city's financial flexibility and detailed planning for future growth. Debt levels should remain moderate since the city plans no further debt issuance in the foreseeable future, though the debt service burden on financial operations is above average.

Located in the northwestern portion of Gwinnett County (general obligation (GO) bonds rated 'AAA' by Fitch Ratings), Suwanee is about 30 miles northeast of Atlanta and encompassing 9.7 square miles. Previously an agricultural community, the city's population has grown rapidly, rising 250% from a 1990 population of 2,492 to 8,725 in 2000 and another 43% to 12,553 in 2005. In addition to this population growth, the city has several future annexations planned.

Taxable assessed valuation (TAV) growth is very strong, rising at a compound annual average of 14.6% over the past eight fiscal years. Concentration among the top ten taxpayers is a concern, as they accounted for about 16.7% of the tax base in fiscal 2006. Growth in the top ten taxpayers is attributable to the presence of new companies, such as Google, as well as increased tenant-occupied landholdings by some real estate companies. The city raised millage from 2.50 to 5.99 mills per $1,000 of TAV and increased the tax levy about 30% in fiscal 2002 to meet new debt service and capital spending costs; since then, millage rates have slowly decreased, while levy growth has remained powerful.

Suwanee has a long history of fiscal strength and stability. The city has had positive general fund results for the past eight fiscal years, and in fiscal 2006, the unreserved general fund balance totaled $4.8 million, or 59% of expenditures, transfers out, and other uses. Suwanee's major financial responsibilities are minimal; because the county funds most infrastructure needs, the city's largest general fund expenditure is public safety.

The Urban Redevelopment Authority of the City of Suwanee, GA is a public body corporate and politic created and existing under the state of Georgia's Urban Redevelopment Law. By resolution, the City has granted the authority 'urban redevelopment project powers' under the Urban Redevelopment law, including the power to issue bonds. The authority is governed by a Board of Commissioners consisting of seven members appointed by the City.

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